Warehouse Management: What It Is and Why It Matters
Warehouse management is all about controlling the operations in your warehouse—from when inventory is ordered to when it’s relocated, sold, or utilized. And warehouse management isn’t just for enormous corporations like Amazon or Target, either.
Warehouse management can help businesses of all shapes and sizes operate better, faster, and smarter—all while using fewer resources. This article will define a warehouse management system and explain how warehouse management software can help businesses optimize every aspect of inventory management.
What is warehouse management?
Warehouse management refers to the daily operations that keep your warehouse running smoothly, from ordering more inventory at just the right time to tracking that inventory properly when it’s moved, used, or sold.
Usually, warehouse management has two major concerns: receiving and shipping. Here’s a little bit more about both:
Receiving inventory is all about what happens when the goods or raw materials your business needs arrive at your warehouses. During receiving, these goods arrive, and are checked in, inspected, and then stored appropriately.
If your business utilizes warehouse inventory management software, your team may use barcode and QR code scanning to check in the inventory when it arrives.
The other major component of warehouse management is shipping. Once your customer places an order, your warehouse will pick the order, pack it up, mark the order, measure or weigh it, then deliver the product to a customer.
If your business uses an inventory app, your team may again use barcodes and QR codes to quickly “relocate” the stock from one location to another or to mark a decrease in available inventory.
Why is warehouse management such a complex process?
Warehouse management isn’t easy, and there are a ton of moving parts. There are a variety of reasons why managing a warehouse can be such a juggling act, including:
A complicated supply chain
One reason managing your warehouse’s inventory can get so complicated? There are so many players involved. Many businesses rely on a complex supply chain of partners, including trucking companies, retailers, distributors, and producers.
Selling across multiple channels
These days, lots of businesses sell their inventory in more than one place. For example, your business might sell t-shirts on its own website, on Etsy, and through various local boutiques around the country. With orders coming in from different places, managing inventory as it comes and goes is that much harder.
Constant demand fluctuations
Many businesses see customer demand ebb and flow over the year. And that’s especially true for companies that sell seasonal items: pumpkin candles, picnic baskets, train sets…
Another complicating factor? Multiple warehouses. After all, the more inventory you manage in more places, the harder it can be to figure out exactly what’s where.
Inefficient warehouse management system
All of these factors—a vast supply chain, multichannel selling, fluctuating demand, and multiple warehouses—can make warehouse management a real headache. And that’s especially true if your business is trying to handle operations using an outdated or ineffective inventory management system.
A warehouse management system is a solution that lets you control, manage, and track the receiving, storing, and shipping of your warehouse’s inventory. Many business owners choose warehouse management software or an inventory app to easily streamline and optimize their warehouse inventory management.
When selecting a warehouse management system, there are several must-have features you’ll want to insist upon. These include:
1. A visual overview of your inventory
One of the best reasons to choose an inventory app over an inventory spreadsheet is the inventory dashboard. This feature helps teams visualize everything they’ve got, all in one place. This means that even if you have stock spread out across many warehouses, your team will be able to determine what your business has on hand in just one glance.
This is extra important if your business has a complicated supply chain, sells goods in multiple places, or stores inventory in many locations.
2. Barcode and QR code scanning
Next up is barcode and QR code scanning. Barcodes and QR codes are quick and accurate ways to access details about your inventory. Best of all, inventory apps like Sortly allow users to scan barcodes and QR codes right from their smartphones—no clunky equipment required.
Once you’ve scanned a barcode or QR code, it’s fast and easy to perform tons of actions: updating quantities, checking items in and out, updating storage locations, adjusting item values or conditions, verifying details, or taking a quick look at an item’s history.
The barcode and QR code function is vital during inventory cycle counts. If your business closes its warehouses to count inventory, barcode and QR code scanning can help automate this tedious process. And not only will your counts be more accurate, but you’ll also be able to resume operations sooner than ever before.
Customized barcodes and QR codes
If your business stocks unlabeled inventory, you’ll want to look for an inventory solution that offers a barcode and QR code generator. This feature will allow you to create, customize, and print barcodes and QR codes for your inventory so you can continue to reap all the benefits of inventory automation.
Ideally, you’ll find a barcode and QR code generator like Sortly’s, which doesn’t require anything complicated to make or print the custom codes. Just a regular printer and some Avery labels.
3. Tons of space for item details
Next, you’ll want to choose a warehouse management system that allows you to finetune every last detail of your inventory. You can manually add details into preset and custom fields within your inventory app. You’ll add all the usual information: item name, quantity, par, serial number, list price, condition, and more. Plus, you can also add pictures, QR codes and barcodes, and relevant attachments.
You’ll also want to create custom fields to track extra details that matter to you. These are different for every business. Maybe these fields track extra-long lead times for deliveries, seasonal notes, or storage directions for hazardous items.
4. Low stock alerts
You’ll also want to choose a warehouse solution that offers customized alerts for dwindling stock levels and impending expiration and warranty end dates. Automating these processes can help your business avoid stockouts, spoilage, and inventory loss.
Choose software that allows you to finetune who gets notified and when. After all, messages like these need to go to the right people to ensure your business runs smoothly around the clock.
5. Customer user permissions
Most warehouses rely on a team of people to receive, manage, and distribute inventory. So it only makes sense that you’d choose a warehouse management system that’s built for lots of users.
Look for an inventory app that’s built for teams, and allows administrators to set customized permissions for each user. Each user should be able to access the inventory from a smartphone, tablet, or regular computer—all equipment your business probably owns already.
6. Inventory reports
Finally, you’ll want an inventory app that allows you to generate customized, detail-rich reports that make running your warehouse (and the rest of your business) even easier. These reports can help you understand how your inventory moves through your business, what’s in high demand, and what’s sitting on your shelves collecting dust.
How to improve your warehouse management strategy today
You’ve learned all about warehouse management and what to look for in a warehouse management system. But what can you do to improve your warehouse management right away? Here are some great jumping-off points.
1. Look at the numbers
Like any other aspect of your business, you can improve your warehouse management immediately by carefully reviewing the data you already have about your warehouse. And it doesn’t have to be anything fancy, either.
Simply reviewing sales reports, inventory audits, and end-of-year inventory can help you understand what’s selling, what’s sitting, and what’s unaccounted for. This data can help you identify your vulnerabilities, practice better inventory control, and fix what’s broken.
2. Optimize your warehouse flow
There’s a lot going on in your warehouse: goods arrive, orders are placed, and inventory moves. One of the best ways to optimize your warehouse’s flow is to take a long, hard look at its operations, then create a better-flowing, more productive strategy for your team.
Maybe that’s changing how inventory is checked in, or ordered, or counted, or moved. Whatever you decide to optimize, make a plan, secure buy-in from your team, and track the results. Chances are, your first workflow won’t be perfect. That’s okay! Learn from your mistakes, and keep making tweaks.
3. Put the right technology in place
Drones. Warehouse robots. Smart forklifts. There are all kinds of technology designed to make warehouse management that much easier for your business. Of course, you don’t have to use drones or robots to help your warehouse operate more smoothly. A simple inventory app can offer tons of powerful automation features without the hefty price tag.
4. Remember your core purpose
At the end of the day, most businesses have a couple of goals: to please their customers while turning a profit. Your warehouse management strategy should account for both of these principles.
Your business needs to stock enough inventory on its warehouses’ shelves to ensure you can meet customer demand without delay. But your company will also want to avoid overordering—a costly and wasteful practice that can zap profits in the blink of an eye.
To strike the right balance, practice inventory control—the science of ordering enough inventory to keep customers happy without wasting money carrying stock you don’t quite need.
5. Keep great records—then learn from them
Finally, optimizing your warehouse management strategy is all about knowing what’s going on in every aisle. To truly improve your warehouse management system, you’ll need to keep collecting data. The more accurate your records, the better inventory control you practice. And the better inventory control you practice, the smoother and more profitable your business will become.
Sortly is a cutting-edge inventory app designed to help businesses of every shape and size take control of their warehouses. Perfect for small companies and large enterprises alike, Sortly’s inventory software is affordable, customizable, and a cinch to use. Why not give Sortly a try today, absolutely free?
Lauren writes about inventory for Sortly. Her favorite thing to organize? Her comically large collection of stuffed animals.